By GREGORY ZELLER //
After a whirlwind state-of-the-state tour outlining billions in state-funded regional initiatives, Gov. Andrew Cuomo whipped out his spending card Tuesday.
Referencing six years of “fiscal discipline” and promising to reduce taxes, Cuomo unveiled a proposed FY2018 Executive Budget that includes $152.3 billion in spending – much of it dedicated to “smart investments in New York’s future,” according to the governor’s office.
Built around $98.06 billion in state operating funds, plus federal stipends, the Cuomo administration’s seventh straight balanced budget proposal “obviously tracks and follows the state-of-the-state agenda,” the governor noted in his Executive Mansion presentation, and in sum and substance is “about helping the middle class.”
“The middle class has felt a lot of pain for a lot of years,” Cuomo said. “In real wages, they’re back to where they were 20 years ago.
“They’ve gotten hit on every front, and the government that was supposed to help them has become disconnected.”
In response comes the FY2018 spending plan, “a very specific, focused, targeted agenda,” according to Cuomo, with key socioeconomic growth in its sights.
Among the proposed budget’s chunkiest line items: a $1 billion increase in education spending – to $25.6 billion, the largest education investment in state history – and $18.3 billion in Medicaid spending, New York’s highest Medicaid bill to date.
The budget also continues the state’s $20 billion investment in statewide affordable housing initiatives while making good on several ideas trumpeted during Cuomo’s state-of-the-state tour, including $163 million to get the ball rolling on the governor’s SUNY and CUNY free-tuition plan and the first tranches of a five-year, $2 billion investment in clean-water infrastructure.
Despite its generous ambitions, the spending plan actually holds year-over-year state spending growth below 2 percent, according to Cuomo’s office, while including the first stages of a middle-class tax cut that will affect 6 million New Yorkers and ultimately save households an average of $700 annually.
“Millionaires” – including several out-of-state ratepayers – will continue to shoulder the bulk of the state’s tax burden, the governor noted, with New York’s so-called “Millionaires’ Tax” remaining intact in FY2018 and for three years hence.
“Frankly, we don’t have the resources to lose the millionaires’ revenue and have this state function the way it should,” Cuomo said, citing a potential $4 billion loss over two years if income-tax breaks were extended to New York’s top ratepayers.
That’s a “devastating amount of revenue to lose,” according to the governor, and a serious threat to college affordability, education spending, middle-class tax cuts and other tentpoles of his FY2018 spending plan.
“The Millionaires’ Tax … is paid by 45,000 taxpayers … (and) half of the people are not residents of the state,” the governor added. “So you’re talking about a small number of people, but you’re talking about a tremendous deficit that it would leave at $4 billion.”
State budget numbers show the top income-tax rate is actually paid by roughly 47,000 New York households and generates about $3.7 billion in annual revenue. The state’s highest current income-tax rate — 8.82 percent on income above $2.1 million — is set to expire Dec. 31, and some legislators have indicated the governor will face a battle over extending the Millionaires’ Tax.
Cuomo’s middle-class tax break, meanwhile, would be “phased in” and drop the state income tax rate in the $40,000-to-$150,000 income bracket from 6.85 percent to 6.45 percent, and to 6.65 percent in the $150,000-to-$300,000 bracket. The rate “would continue to drop as the years go on,” Cuomo said.
Cuomo’s plan, which has been criticized for its lack of transparency, still must earn state Legislature approval, with legislators likely to make their own spending recommendations. The 2018 fiscal year begins April 1.
Referencing wise state investments that paid off handsomely – including a $150 million investment in an “I Love NY” promotional campaign that generated “about $9 billion in revenue,” according to Cuomo – the governor said his ambitious spending plan keeps “the arrows pointed in the right direction.”
And it all starts with “national firsts” in areas like college affordability, Cuomo noted.
“You’re going to see a new New York, just in terms of redevelopment, in terms of the transportation facilities, the infrastructure, etc.,” the governor said. “You’ve never had as robust a development program as we have undertaken, and we will make a reality.”